Below are a few of the most popular asked questions. If they
don't answer your questions or you would like more information please
call us at (800) 648.3962, or email us help@advocatescredit.com
Q Who is qualified for our program?
Q How will ACA settle my debt?
Q Can I still use my credit cards?
Q What are the costs associated with the program?
Q Can I be sued?
Q Can ACA stop creditors from calling me?
Q How does the program affect my credit?
Q Does ACA repair my credit?
Q Can creditors garnish my wages?
Q Can't I negotiate my debts with my creditors on
my own?
Q What are the tax consequences?
Q How long does the process take?
Q Why not just file for Bankruptcy?
Who is qualified for our program?
ACA’s debt settlement program is for those facing financial hardship. We
do not advocate that any person default on their debts and do not attempt to
negotiate debts for people who have reasonable means to pay off what they owe. If
you are late on paying debts that total more than $10,000, are having difficulty
keeping up with your payments or may face possible bankruptcy, you may qualify
for our program.
How will ACA settle my debt?
We will work diligently to negotiate a reduced amount less than what you currently
owe, typically between 25-40%, and set you up with a realistic monthly payment
based upon your specific circumstances. Interest and fees will continue accumulating
on the enrolled accounts each month, however, our account managers begin negotiating
from the original amount of debt when you enrolled. Before we can start
the negotiation process you will need to put aside money and save every month
in a settlement trust account. Based upon what you are able to pay each
month into your debt reduction savings account, we can determine how many months
you will be part of the program. Throughout the program, we can help become the
main communicator
to your creditors and will guide you in dealing with burdensome phone calls and
letters from your creditors.
Can I still use my credit cards?
All credit cards in the program will not be active; you will need to cancel them. Depending
on your specific circumstances, you may be able to hold onto a card for emergency
purposes only. Any cards you DO NOT put into the program should not be used.
This program is for you to get out of debt.
What are the costs associated with the program?
At ACA, our fees are simple and fair. We feel that you will
find them reasonable and competitive, especially when compared to the
amount of interest you are paying every month on your debt. ACA charges
a $399 one time set-up fee, and 29% of amount saved, which is calculated
based on the total amount of debt that an individual brings into the
debt settlement program less the amount we have negotiated on your
behalf. You will also be charged a $49 monthly administrative fee after
the 6th month of the program. All costs and fees are always
fully disclosed to you in advance, and you are required to
sign for approval before you commit to our program.
Can I be sued?
Your creditors have the right to sue you to recover money owed to them. This
could happen regardless of whether you enter a program with us. You
do not have to panic if you do receive a summons during our program, we will
work with you in handling action that occurs while you are in our program.
Usually, the purpose of the lawsuit is to force a settlement on the matter. In
our experience, most creditors would rather not go to the expense of suing
and simply try to negotiate a settlement. It is important to understand that
at ACA, we are not attorneys, and we do not, and cannot, provide legal advice
to you.
Can ACA stop creditors from calling me?
Your creditors have every right to try and contact you in order to collect
a debt. While we cannot defend you in a lawsuit or give you advice on
how to deal with threats from creditors or collectors, we can tell you that
you don’t have to take all of their calls. You can write to them
and demand that they only communicate with you in writing, and we will
show you how. ACA provides the information and documentation needed to
deal with the calls once you become a member. If you follow our instructions,
you may be successful in reducing some of the harassing telephone calls. If
your account is in collections, collection agencies must adhere to the FDCPA
Guidelines. If you would like to learn more go to: Fair
Debt Collection Practices Act
How does the program affect my credit?
Debt settlement isn't for everyone because it attacks the problem more
aggressively than other programs. We need you to know that debt settlement
will lower your credit score. But, your current high debt may also lower your
credit score. While debt settlement will lower you’re your credit score,
it will get back in order financially so that you can build that score up again.
In addition, you will not have the long term effect of a public record as you
would with bankruptcy. Once a settlement is reached, we will send you documents
to forward to the credit bureaus. This will verify that the account has been
settled and paid with a $0.00 balance. As your debts are paid off, your debt-to-income
ratio will improve and your credit will begin to heal itself in the future.
Does ACA repair my credit?
ACA does not engage in credit repair services. No company can remove
legitimate negative items from your credit report. Negative items will
remain on your credit report according to the conditions imposed by the credit
reporting agencies. The goal of a Debt Settlement program is to settle your
delinquent accounts. When a delinquent account is settled, this is reflected
on your credit report. A settled account is better than an unresolved
delinquent account. Your credit score should improve after successfully
completing our program. Since these debts are paid, your debt-to-income
ratio should improve. Debt-to-income ratios are not part of a credit score;
however, they are an important measurement by which lenders evaluate applicants
who apply for auto and home loans.
Can creditors garnish my wages?
The creditor first has to sue you, successfully obtain a judgment,
and then file for a garnishment action. If you’re willing
to work with your creditors, wage garnishment can normally be avoided. So,
it’s essential to start on the program before you are faced
with a lawsuit.
Can't I negotiate my debts with my creditors on my own?
You may indeed be able to settle your own debts. But haggling
with creditors can be difficult for some people in debt. Creditors
have highly skilled negotiators working on their side, waiting
to take advantage of any irrational misstep you might have. They
don’t want to lose any of their money. Our professional debt
settlement staff knows how to sidestep their strategies. We have
established relationships with many credit card companies.
What are the tax consequences?
You will need to pay taxes on the settlement. This means that if you owe $5000,
and our staff talks the creditor down to a balance of $2000, then you will
be responsible for taxes on a portion of the remaining $3000. This may
seem alarming to you. But think about it in terms of taxes versus interest. If
you had eventually paid off all debts in full over a longer time frame, you
would have paid a significant portion in interest to the creditor. Usually,
the amount you will need to pay in taxes after debt settlement is significantly
less than the amount you would have paid in interest. We encourage you to consult
a tax advisor if you have more questions. In some cases you may be eligible
to file a 982 form and not have to pay taxes on the amount saved.
How long does the process take?
Each individual case varies depending upon the current amount of outstanding
debt and how much you can realistically afford to save each month. On
average, a program will last between 12-36 months. In your initial consultation,
your ACA debt specialist will review your situation and break down your program
parameters, including the estimated time to complete your debt reduction.
Why not just file for Bankruptcy?
Filing for Bankruptcy is a viable
option. However, you must remember that Bankruptcy will remain
on your credit for up to 10 years (and in public record indefinitely)
and will have major repercussions with respect to all your financial
dealings in the future. Debt Settlement would require you to pay
a reduced amount from the total debt amount. In most situations,
Bankruptcy should only be considered a final resort after all else
has failed. ACA is not a law firm, and cannot give legal
advice. Please consult with a bankruptcy attorney if you
wish to explore that option.
|
